Question
The amount payable on maturity of a certain sum which is
invested for 5 years at a certain rate percent p. a. is ₹9,600 and the amount payable on the same sum invested for 10 years at the same rate is ₹12,600. If simple interest is offered in both cases, the rate of interest p. a. is:Solution
Simple Interest, SI = (P × R × T) / 100 For the 10-year investment plan, Rs. 9600 would be considered as the principal amount. Since the interest being calculated is simple interest, the interest incurred in 5 years- = (12600 - 9600) =Rs. 3000 Hence, interest incurred every year = 3000 / 5 = Rs. 600 Now considering the 5-year investment plan, the principal amount = (9600 - 3000) = Rs. 6600 Let the rate of interest be R%. ⇒ R = (600 × 100) /6600 R = 100/11% ∴ The rate of interest is 9(1/11)% p.a.
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